President-elect Donald Trump walks onto the floor of the New York Stock Exchange (NYSE) with his wife Melania, after being named TIME’s “Person of the Year” for the second time on December 12, 2024 in New York City.
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The S&P 500 has now lost all of its post-election gains as President Donald Trump dismayed some investors who hoped he was just bluffing on tariffs and instead ignited a trade war.
The index fell to a low of 5,732.59 in Tuesday’s broad market sell-off, well below the 5,782.76 close on Election Day, Nov. 5. Through midday, the benchmark remained below that level.
The S&P 500 has now given up all of its postelection gains.
Investors originally embraced Trump’s victory, as the S&P 500 jumped 2.53% on Nov. 6 on the hopes deregulation and tax cuts would outweigh any tariff impact. At its peak, the S&P 500 closed at 6,144.15 on Feb. 19, putting total post-election gains at 6.25%. The gains began to be called the “Trump bump” on Wall Street.
The S&P 500 is now down 2% for 2025 and the Nasdaq Composite index is in correction territory.
Some of the sectors that many investors and strategists expected to benefit under Trump are also down since the election.
Small caps hit
The Industrial Select Sector SPDR Fund (XLI) has fallen more than 3% since Election Day. The Energy Select Sector SPDR Fund (XLE) has slid over 4%. The small cap Russell 2000 — which jumped 5.84% on Nov. 6 — is down about 9%.
One so-called Trump trade that is still up is bank stocks, with the Financial Select Sector SPDR Fund (XLF) still up more than 6% since Election Day. However, that sector fell more than 3% on Tuesday.
The decline comes as the Trump administration’s tariff plans start to take effect. While Trump raised tariffs in his first stint in the White House and campaigned in 2024 on raising them again, many Wall Street strategists and investors have been skeptical that the levies will be fully implemented.
However, tariffs on Mexico, Canada and China went into effect Tuesday. Canada and China have already announced retaliatory measures, and Mexican President Claudia Sheinbaum said her country will do the same this weekend.
U.S. Commerce Secretary Howard Lutnick said on “Squawk Box” on Tuesday that the current tariffs are related to concerns about fentanyl crossing the border and that the U.S. still plans to announce broader measures in April. Canadian Prime Minister Justin Trudeau pushed back against the fentanyl justification, calling it “totally false.”
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